WARSAW, Feb 13 The Polish government on Thursday
dismissed the head of the state road agency, who had been at the
centre of disputes with international engineering firms over a
European-backed programme to build new roads.

Many contractors allege that Lech Witecki's agency, known by
its Polish acronym GDDKiA, had forced them to take heavy losses
on contracts to build Polish motorways, and even drove some into
bankruptcy. Witecki has denied the allegations.

The Polish government named a GDDKiA executive, Ewa
Tomala-Borucka, as caretaker head on Thursday.

In her previous role, she was involved in a problem-plagued
bridge in southern Poland that came to symbolise the tensions
between the agency and contractors. GDDKiA did not immediately
respond to questions from Reuters about her role in the dispute
about the bridge.

Firms that have been in dispute with the agency over
payments include Austria's Strabag and Alpine Bau,
Ireland's SIAC, SISK and Roadbridge, as well as a unit of
Spain's Ferrovial, and a unit of Germany's Bilfinger
.

"We are optimistic this will lead to real improvement in
practice," Ulrich Paetzold, Director General of the European
Construction Industry Federation, said of Witecki's departure.
He said he hoped Poland would take immediate steps to keep firms
which were hit by disputes with the agency out of bankruptcy.

Witecki had headed the agency since 2008, and oversaw a
massive injection of cash. Roads were part of a 37.56 billion
euro ($51 billion), seven-year EU infrastructure programme for
Poland - the bloc's biggest ever development programme in a
single member state.

Elzbieta Bienkowska, Poland's deputy prime minister,
announced Witecki's dismissal. "Many things have certainly
succeeded and everyone feels a qualitative leap that has been
made in this time," she said in a statement.

"Unfortunately we were unable to avoid mistakes. The most
severe were many delays in the schedules of work and the bad
atmosphere in relations with contractors and the entire
construction sector."

Witecki has said he delivered thousands of kilometres of
good quality highways, provided good value for taxpayers and
approved modifications to contracts when justified.

He said independent audits had not found any evidence of his
agency breaking Polish or EU rules, and that in many cases
contractors were to blame for the problems.

BREAKDOWN IN TRUST

A Reuters Special Report last year contained allegations
from construction industry executives that GDDKiA had, in many
cases, refused to extend the deadline on road projects, or to
increase the budget, even when there were legitimate engineering
reasons for doing so.

The executives said that, as a result, they went over-budget
or behind schedule, allowing GDDKiA to impose financial
penalties or withhold payments.

Several construction executives had said their firms would
hesitate to bid on any new Polish road-building contracts as
long as Witecki remained in charge of the agency.

Six EU governments, including Germany and France, complained
to Poland about the way their companies were treated by GDDKiA,
while the European Commission said it was looking into the
issue.

Finn Lyden, former chief executive of Ireland's SIAC, which
had to seek creditor protection after it became entangled in a
dispute with GDDKiA over payments, said Witecki's style of
managing the contracts had caused significant damage to
contractors, and to the Polish economy.

"In simple terms, Poland and the EU could have got many more
kilometres of motorway for the money spent, with far less
delays, if he (Witecki) had been willing to learn from
international experience," Lyden told Reuters.

One of the most bitter disputes between Witecki and
contractors was over a motorway bridge at Mszana, near Poland's
border with the Czech Republic. After years of wrangling between
GDDKiA and the original contractor, Alpine Bau, it is still not
completed.

The caretaker GDDKiA chief, Tomala-Borucka, was previously
agency chief in the region where the bridge is located and was
involved in the contract.

Jaroslaw Duszewski, a former Alpine Bau executive, said that
given her previous role, it was still not clear whether the
changes were positive for the construction sector. The
government gave no deadline for choosing a permanent chief.

"We must see who is going to be in this position full time,"
said Duszewski.

FRANKFURT/LONDON, Dec 9 The European Central
Bank hopes its decision to confront struggling Italian bank
Monte dei Paschi at last will draw a line under a multi-year
crisis that has risked tarnishing its reputation as a credible
supervisor.

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